Empty property rates relief: High Court decision

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Shoosmiths has commented in the past about actions local authorities are taking to challenge the availability of charitable rates relief in connection with various arrangements that charities have been involved with. There has been a recent decision by the High Court in Kenya Aid Programme v Sheffield City Council that throws further light on this subject.

As we have previously noted, it has become increasingly common for charities and property owners to enter into arrangements on empty properties that would otherwise incur a full rating charge to enable charities to occupy the premises so as to pay a lower amount in rates.

The leases are usually set up so that the charity pays a peppercorn rent, the land-owner pays the rates via a donation to the charity plus the charity usually receives an additional donation, which represents its profit on the transaction. Local authorities have become increasingly concerned about the loss of rating income arising as a result of these arrangements…

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